California Governor Arnold Schwarzenegger says he and lawmakers have reached a deal to increase the minimum wage to $8 per hour in two steps.

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

If approved, the legislation would increase the state's minimum wage from $6.75 to $7.50 on January 1, 2007 and then to $8.00 in January 1, 2008.

Schwarzenegger says he opposed previous minimum-wage proposals because they were indexed to inflation.